Department of Justice - All posts tagged Department of Justice

Poor Preet Bharara. His office just won a big criminal insider-trading case against a portfolio manager from SAC Capital, but all anyone wants to talk about is the controversy over the arrest of an Indian diplomat.

Bharara runs the Justice Department for the Southern District of New York, and last week the office charged a deputy consul general named Devyani Khobragade with visa fraud. According to the Justice Department, Khobragade tried to get a visa for her nanny/maid and told the U.S. government that she’d pay the maid $4,500 a month, when in reality Khobragade paid her less than $600.

By now you’ve heard that the government won its insider-trading case against Michael Steinberg, a portfolio manager at the hedge fund SAC Capital, after a jury found him guilty late Wednesday. So where do we go from here? MarketWatch asked the experts for their thoughts on what the verdict means.

Their main takeaway: It doesn’t look good for others accused by the government of insider trading, whether they’re at SAC or anywhere else. The government, at the moment, seems to have the upper hand.

J.P. Morgan Chase & Co.
/quotes/zigman/272085/delayed/quotes/nls/jpmJPM has lost a key battle in a long-running fight with the Federal Deposit Insurance Corp.: In its $13 billion settlement with the Justice Department, it agreed that it won’t ask the FDIC to pay for the WaMu-related portion.

But the bank made clear that the broader dispute is hardly over. It says it still has the right to go after the FDIC to pay for WaMu claims from private investors.

It’s a complicated fight, so let’s unwind it a bit. Recall that one of the most contentious hang-ups to J.P. Morgan’s $13 billion settlement with the Justice Department, which was announced Tuesday after weeks of tense negotiations, was the bank’s belief that it should not be on the hook for lawsuits stemming from bad mortgage loans made by Washington Mutual. The Justice Department disagreed, and in the $13 billion settlement it got its way. But J.P. Morgan CEO Jamie Dimon and CFO Marianne Lake said the bank still had the right to go after the FDIC receivership for WaMu-related lawsuits brought by private investors.

The Justice Department’s settlement with J.P. Morgan Chase & Co. paints an unflattering picture of a bank where employees knew the concerns about shaky mortgages and chose to ignore them.

According to the Justice Department, “due diligence vendors” told J.P. Morgan that a number of the loans they looked at did not meet underwriting guidelines. The vendors flagged those loans as “Event 3.” Some were missing documents, others had appraisal estimates that seemed wrong, others listed borrowers’ incomes that seemed greatly exaggerated. One vendor report said that of the 23,668 loans the vendor reviewed for J.P. Morgan from the first quarter of 2006 through the second quarter of 2007, more than a quarter of them – or 6,238 – were initially graded Event 3. J.P. Morgan eventually accepted just more than half of those loans, “waiving” them through to be bundled into securities. The waivers were granted both on a case-by-case basis and in bulk.

Bitcoin exploded higher again on Monday ahead of what could be an upbeat Senate Committee hearing on the virtual currency, plus news of a major bitcoin exchange in China that just got $5 million in funding.

J.P. Morgan Chase & Co. is paying for some peace, say experts but the possibility of further fines is an unknown, say legal experts. The biggest U.S. bank by assets is looking at a record fine to get its legal woes behind it as it negotiates with the government.

“The short answer is we don’t know if there will be further fines for the firm,” said Jacob Frenkel, former SEC enforcement lawyer and federal prosecutor. “The firm is still fright with litigation.”

Jamie Dimon has no plans to head up another major bank after being the chairman and CEO of J.P. Morgan Chase & Co.

That’s what Dimon told the audience at the Financial Women’s Association event last Tuesday during a “fireside” chat, when asked about his future, according to sources at the event.

The CEO was casual, relaxed and jocular at the off-the-record event that drew approximately 300 people to J.P. Morgan’s 50th floor offices on Park Avenue in Manhattan.

Dimon responded to a question from the audience asking him what was next for the CEO. He said he loved the company he worked for and loved his job but didn’t see himself tackling another big job after being head of the biggest U.S. bank by assets.

Transocean Ltd.
/quotes/zigman/531240/quotes/nls/rigRIG shares are up 7% after it agreed to pay $1.4 billion to settle criminal and civil charges with U.S. regulators over the 2010 Deepwater Horizon accident.

In a note to clients issued shortly after Transocean's announcement, Barclays analysts said the company's $1.4 billion payment fell about $1.1 billion short of its projection — an obvious boost for Transocean.

The lower payment, “could pave the way for a significant valuation recalibration as clarity on the company's Macondo liability is one of the company's last strategic imperatives” in a plan laid out by Transocean under the title, “Road to Recovery,” Barclays analyst James West said.

With Thursday's announcement, Halliburton Co.
/quotes/zigman/228631/quotes/nls/halHAL remains the last oil service company involved in the accident that has not settled its Macondo liabilities, he noted.

“We think Halliburton is next in line and a settlement should accelerate the company's plans to hike its dividend and by back stock,” West said. Shares of Halliburton rose 2.5%.

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